Section 1. State empowered to guarantee bonded indebtedness of education districts. To secure lower interest costs on the general obligation bonds of school districts, education service districts and community college districts, the State of Oregon may guarantee the general obligation bonded indebtedness of those districts as provided in sections 2 to 6 of this Article and laws enacted pursuant to this Article. [Created through H.J.R. 71, 1997, and adopted by the people Nov. 3, 1998]

Section 2. State empowered to lend credit for state guarantee of bonded indebtedness of education districts. In the manner provided by law and notwithstanding the limitations contained in sections 7 and 8, Article XI of this Constitution, the credit of the State of Oregon may be loaned and indebtedness incurred, in an amount not to exceed, at any one time, one-half of one percent of the true cash value of all taxable property in the state, to provide funds as necessary to satisfy the state guaranty of the bonded general obligation indebtedness of school districts, education service districts and community college districts that qualify, under procedures that shall be established by law, to issue general obligation bonds that are guaranteed by the full faith and credit of this state. The state may guarantee the general obligation debt of qualified school districts, education service districts and community college districts and may guarantee general obligation bonded indebtedness incurred to refund the school district, education service district or community college district general obligation bonded indebtedness. [Created through H.J.R. 71, 1997, and adopted by the people Nov. 3, 1998]

Section 3. Repayment by education districts. The Legislative Assembly may provide that reimbursement to the state shall be obtained from, but shall not be limited to, moneys that otherwise would be used for the support of the educational programs of the school district, the education service district or the community college district that incurred the bonded indebtedness with respect to which any payment under the state’s guaranty is made. [Created through H.J.R. 71, 1997, and adopted by the people Nov. 3, 1998]

Section 4. Sources of revenue. The State of Oregon may issue bonds if and as necessary to provide funding to satisfy the state’s guaranty obligations undertaken pursuant to this Article. In addition, notwithstanding anything to the contrary in Article VIII of this Constitution, the state may borrow available moneys from the Common School Fund if such borrowing is reasonably necessary to satisfy the state’s guaranty obligations undertaken pursuant to this Article. The State of Oregon also may issue bonds if and as necessary to provide funding to repay the borrowed moneys, and any interest thereon, to the Common School Fund. The bonds shall be payable from any moneys reimbursed to the state under section 3 of this Article, from any moneys recoverable from the school district, the education service district or the community college district that incurred the bonded indebtedness with respect to which any payment under the state’s guaranty is made, any other funds available for these purposes and, if necessary, from state ad valorem taxes. [Created through H.J.R. 71, 1997, and adopted by the people Nov. 3, 1998]

Section 5. Bonds. Bonds of the state issued pursuant to this Article shall be the direct obligations of the state and shall be in such form, run for such periods of time and bear such rates of interest as shall be provided by law. The bonds may be refunded with bonds of like obligation. [Created through H.J.R. 71, 1997, and adopted by the people Nov. 3, 1998]

Section 6. Legislation to effectuate Article. The Legislative Assembly shall enact legislation to carry out the provisions of this Article, including provisions that authorize the state’s recovery, from any school district, education service district or community college district that incurred the bonded indebtedness with respect to which any payment under the state’s guaranty is made, any amounts necessary to make the state whole. This Article shall supersede all conflicting constitutional provisions and shall supersede any conflicting provision of any law, ordinance or charter pertaining to any school district, education service district or community college district. [Created through H.J.R. 71, 1997, and adopted by the people Nov. 3, 1998]